Three Way News
Your Source. For everything. Really.
Contributors
- Hammer
- Jambo
- Libby Mae
Current Poll
Recurring features
Hammer's Favorites
- Dobson v. Sponge-Bob
- Calvin, the nest egg
- Pat's predictions
- Bachmann spins Cupertino
- 205 atheists assume the bench
- Fox spins Oil for Food
- Fact check: highest taxed state
- Gen. Myers v. Reality
- Janice Rogers Brown
- Killing Field
- Kline hates Big Bird
- Vote Luca Brasi!
- Cornyn's Stalinist Supreme Court
- Rumsfeld's hidden metrics
Jambo's Favories
- Dolphin research updates
- We all shine on
- If you have to write...
- Columnist NY Times should have
- Truth about taxes
- Fourth of July
- Movie objects
- Lost in supermarket
- Dysfunctional Farmer Labor party
- Punks you hated
- Some preacher from east
- Winning issues
Monday, July 17, 2006
More on the supply side magic
Kevin Drum takes on the Laffer curve:
Indeed. But Greg Ip and Deborah Solomon point out something a bit peculiar today in the Wall Street Journal. (The news pages, that is. You won't find this on the editorial page.) Here's the conundrum: if tax revenues are 5% higher than projected thanks to the economy-boosting magic of tax cuts, shouldn't the economy itself be larger than projected too? But it's not. Economic growth is only 0.1% higher than projected six months ago.
Economic growth is a boring "as expected" (although, to be fair, overall economic growth has been good to very good lately) -- yet tax revenues are higher than expected. Drum posits that this is because of the division of the spoils of the economic expansion. He might well be right, but let me suggest something a wee bit simpler: tax revenues are higher than expected because the administration wanted to exceed expectations. I'll see if I can find a comparison between the CBO and the White House on economic growth and tax revenue projections for 2006.
